John Cotton on the Just Price, 1639

In early modern and medieval times, people often thought in terms of the just price. Each thing had an objective value and price that was independent of market conditions. Read the example below from Boston and think about what makes John Cotton's understanding of the economy different than our own. Also, do you know of any modern-day equivalents to his thinking?

FROM JOHN WINTHROP'S JOURNAL

At a general court holden at Boston, great complaint was made of the oppression used in the country in sale of foreign commodities; and Mr. Robert Keaine, who kept a shop in Boston, was notoriously above others observed and complained of, and, being convented, he was charged with many particulars; in some, for taking above six-pence in the shilling profit; in some above eight-pence; and, in some small things, above two for one; and being hereof convict, (as appears by the records,) he was fined £200, which came thus to pass: The deputies considered, apart, of his fine, and set it at £200; the magistrates agreed but to £100. So, the court being divided, at length it was agreed, that his fine should be £200, but he should pay but £100, and the other should be respited to the further consideration of the next general court. By this means the magistrates and deputies were, brought to an accord, which otherwise had not been likely, and so much trouble might have grown, and the offender escaped censure. For the cry of the country was so great against oppression, and some of the elders and magistrates had declared such detestation of the corrupt practice of this man (which was the more observable, because he was wealthy and sold dearer than most other tradesmen, and for that he was of ill report for the like covetous practice in England, that incensed the deputies very much against him). And sure the course was very evil, especial circumstances considered:

1. He being an ancient professor of the gospel:
2. A man of eminent parts:
3. Wealthy, and having but one child:
4. Having come over for conscience' sake, and for the advancement of the gospel here:
5. Having been formerly dealt with and admonished, both by private friends and also by some of the magistrates and elders, and having promised reformation; being a member of a church and commonwealth now in their infancy, and under the curious observation of all churches and civil states in the world.

These added much aggravation to his sin in the judgment of all men of understanding. Yet most of the magistrates (though they discerned of the offence clothed with all these circumstances) would have been more moderate in their censure:

1. Because there was no law in force to limit or direct men in point of profit in their trade.
2. Because it is the common practice, in all countries, for men to make use of advantages for raising the prices of their commodities.
3. Because (though he were chiefly aimed at, yet) he was not alone in this fault.
4. Because allmen through the country, in sale of cattle, corn, labor, etc., were guilty of the like excess in prices.
5. Because a certain rule could not be found out for an equal rate between buyer and seller, though much labor had been bestowed in it, and divers laws had been made, which, upon experience, were repealed, as being neither safe nor equal.

Lastly, and especially, because the law of God appoints no other punishment but double restitution; and, in some cases, as where the offender freely confesseth, and brings his offering, onlv half added to the principal. After the court had censured him, the church of Boston called him also in question, where (as before he had done in the court) he did, with tears, acknowledge and bewail his covetous and corrupt heart, yet making some excuse for many of the particulars, which were charged upon him, as partly by pretence of ignorance of the true price of some wares, and chiefly by being misled by some false principles, as

1. That, if a man lost in one commodity, he might help himself in the price of another.
2. That if, through want of skill or other occasion, his commodity cost him more than the price of the market in England, he might then sell it for more than the price of the market in New England, etc.

These things gave occasion to Mr. Cotton, in his public exercise the next lecture day, to lay open the error of such false principles, and to give some rules of direction in the case."

Some false principles were these:

1. That a man might sell as dear as he can, and buy as cheap as he can.
2. If a man lose by casualty of sea, etc., in some of his commodities, he may raise the price of the rest.
3. That he may sell as he bought, though he paid too dear, etc., and though the commodity be fallen, etc.
4. That, as a man may take the advantage of his own skill or ability, so he may of another's ignorance or necessity.
5. Where one givestime for payment, he is to take like recompense of one as of another.

The rules for trading, were these:

1. A man may not sell above the current price, i.e., such a price as is usual in the time and place, and as another (who knows the worth of the commodity) would give for it, if he had occasion to use it: as that is called current money, which every man will take, etc.
2. When a man loseth in his commodity for want of skill, etc., he must look at it as his own fault or cross, and therefore must not lay it upon another.
3. Where a man loseth by casualty of sea, or, etc., it is a loss cast upon himself by providence, and he may not ease himself of it by casting it upon another; for so a man should seem to provide against all providences, etc., that he should never lose; but where there is a scarcity of the commodity, there men may raise their price; for now it is a hand of God upon the commodity, and not the person.
4. A man may not ask any more for his commodity than his selling price, as Ephron to Abraham, the land is worth thus much.

Keayne was censured by his church in Boston (in addition to the fine imposed by the General Court). Fourteen years later (1653), Keayne found it necessary to write a 158-page justification for his actions as his last will and testament.

Source: John Winthrop, , 2 vols. (Boston, 1853), 1:377-82. The History of New England from 1630 to 1649. Obtained at www.universitylake.org/history/keayne.html, ca. 2001. That page is no longer available, so I have posted it on this wiki.